TCL Group

TCL Group

Overview: TCL – The Creative Life

TCL Group is a Chinese multinational electronics company headquartered in Huizhou, China. It comprises three listed companies: TCL Corporation, which is listed on the Shenzhen Stock Exchange, TCL Multimedia Technology Holdings, Ltd. and TCL Communication Technology Holdings, Ltd., which are both listed on the Hong Kong Stock Exchange.

TCL's main products are TVs, DVD players, air conditioners, mobile phones, personal computers, home appliances, electric lighting, and digital media. It employs more than 60,000 people and has 40 sales offices around the world.

The TCL Group was founded in 1981 and started with the production of video and audiocassettes. After its privatization through international investors in the 1990s, it became one of the fastest-growing companies in the world. The average growth rate since 2000 has been 47 percent.

TCL increased its brand value sixfold from 1999 to 2011

TCL is China's largest TV producer with a market share of 18.7 percent in 2012. In the same year, it raised to 4th largest consumer electronics producer after Samsung, LG and Sony. The improvement in market share is attributable to the Group's continuous focus on "speed and efficiency" as development strategies and to its dedication in the optimization of its product mix and sales channels.

Between 2011 and 2012, TCL raised its sales volume of LCD TVs by 36.7 percent in overseas markets and by 62.5 percent in the PRC market, exceeding the industry average by far.

As it is already the most valuable TV brand in China with a total value of USD 3.5 bn, the long-term goal of TCL is to become one of the most respected companies and one of the most valuable brands worldwide in the next ten years.

Internationalization Strategy: M&A Strategy since 2000

Since 2000, TCL tries to establish its brand in overseas markets through a merger and acquisition strategy. The first acquisition in Europe was the one of the German TV manufacturer Schneider. TCL paid a total amount of USD 10.5 mn for Schneider, but the production ceased in 2005.

In 2004, TCL and Thomson from France founded TTE Corporation. Later in 2004, TCL singed a joint venture agreement with the French telecommunication company Alcatel and founded the company TAMP. Since 2005, TAMP has been operating as a wholly owned subsidiary of TCL.

One year later, TCL and Toshiba co-signed the "Memorandum of Understanding" to establish two companies, a manufacturing company specialized in manufacturing refrigerators and washing machines, and a sales company mainly focused on sales.

Moreover, TCL and Intel signed a strategic cooperation agreement in 2008. The two parties announced that they would join hands to develop the next-generation internet television and collectively promote the full integration between internet and television.

R&D and Intellectual Property: "Transformation and Innovation, Knowledge and Action"

TCL's aim is to become the most creative and innovative Chinese brand within a timeframe of ten years. In order to achieve this goal it has established eighteen R&D centers and R&D branches in China, the US, France and Singapore. In total, it employs more than 4,000 people in its R&D sector worldwide and the total R&D investment reached USD 280 mn in 2010.

The following graphics represent TCL's patent and utility model applications. While the first two graphs depict the number of applications over the years and across countries, the last two graphs represent the distribution across technology sectors.

The main difference between a patent and an utility model is the durability and the strength of protection. Patents are protected for twenty years, while utility models are only protected for ten years. Thus, an utility model can be described as a weaker form of patent.

The first chart shows the development of patent and utility model application over time. The number of applications were nearly constant in the period between 2000 to 2003. Since then, the number of applications increased annually, resulting in a maximum with almost 700 applications in 2010.

The next chart illustrates the distribution across different geographical areas. Despite an ambitious internationalization strategy, TCL has its main focus on the Chinese market and filed the most applications there. The foreign filed applications were especially registered in the US, Europe and the worldwide patent office (WIPO). This is the result of the R&D centers TCL operates in the US, France and Singapore.

As manufacturer of TVs, TCL mainly focuses on the areas of audiovisual- and telecommunication technologies. In these two sectors it filed more than 2,000 patent and utility model applications from 2000 to 2010. The high number of patent and utility model applications in other sectors indicates that TCL researches in a lot of different areas.